Foreclosures are down on a quarterly basis, too. RealtyTrac says that third-quarter figures show the lowest level of foreclosure filings since the second quarter of 2006.

States that saw the biggest rate of reduction in quarterly foreclosure closings were Colorado, down by 71%; Arizona, down 63%; and California, down 59%. Foreclosures were up in some states, including Maryland (up 259%!), Oregon (252%), New Jersey (53%) and New York (25%).

Foreclosure reductions are all about a healthier housing market and a more robust economy. But longer processing times could also be slowing foreclosure activity.

"The September and third-quarter foreclosure numbers show a housing market that is haltingly returning to health," says Daren Blomquist, vice president at RealtyTrac. "In a healthy housing market foreclosures are rare but streamlined while still protecting the rights of the homeowner. While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery."

The economy seems to be picking up at different levels state by state, and that could be why some aren't seeing big declines in trouble-laden mortgages.

"The sharp jumps in foreclosure activity in some local markets may come as a surprise to some," Blomquist says. "These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure."

"In addition, even slight economic downturns at the local or regional level can doom these homeowners hanging on by a thread," he says.

One sure-fire sign that a state or regional economy is experiencing lower foreclosure rates is the local jobs market. If hiring is up, foreclosures are down, and vice-versa. That could spell trouble for areas affected by the ongoing U.S. government shutdown, which affects mainly government workers, and small businesses in towns with high levels of federal government employees.